Cristallina S.A. v. Christie, Manson & Woods International, Inc.

Cristallina S.A. (plaintiff), an art dealer, sought to raise money by selling some of its paintings. Cristallina contacted an auction house, Christie, Manson & Woods International, Inc. (Christie) (defendant) to discuss the sale of several Impressionist paintings. Dimitry Jodidio, Cristallina’s representative, met with David Bathurst, an expert on Impressionist art and Christie’s president. Bathurst recommended that Cristallina sell eight paintings at public auction. Bathurst estimated that sales would generate between $8.5 million and $12.6 million. Jodidio agreed to auction the paintings. After consigning the eight paintings for auction to Christie, Jodidio and Bathurst still needed to agree to reserve (i.e., minimum) prices for the paintings. Christopher Burge, head of Christie’s Impressionist department, originally had concurred with Bathurst’s estimates for the paintings, but he determined that the paintings would be difficult to sell at auction and that some of Bathurst’s estimates were unobtainable. No one informed Jodidio of Burge’s expert opinion. As the auction approached, Christie’s public-relations officer, acting on information from Burge, issued a statement that Christie expected the paintings to sell for between $5 million and $9 million. Christie had a policy of not setting the auction reserves above the high-value estimates. Despite this, Bathurst ultimately recommended a reserve of $9.25 million, to which Jodidio agreed. However, Bathurst failed to inform Jodidio about the lower expected range released by Christie’s public-relations officer or that rumors as to the authenticity of the paintings had hurt the paintings’ values. Only one painting sold at the auction. Cristallina sued Christie for fraud and breach of fiduciary duty, among other claims, for failure to bring material information to its attention and recommending high reserves despite its policy of setting reserve prices below high estimates. Christie filed a motion for summary judgment, which was granted. Cristallina appealed.